The U.S. Airlines industry has gone through several ups and downs in the past five years. Major negative influences on the industry included skyrocketing oil prices since 2005, economic recession in the U.S. since 2008, global economic downturn in 2009 and the "swine flu" outbreak. The airlines industry is cyclical and sensitive to a number of key drivers, the most prominent of which is the world price of crude oil. Since the beginning of 2009, prices of crude oil have been half of what they had been the year before, creating some relief for airlines. However, some industry operators hedged their fuel contracts at higher rates and are still paying the price. Many of the top airlines in the industry have responded by reducing services and aircraft fleet sizes, introducing new fees and higher fuel surcharges and reducing the number of people employed. Even with the price ...

For Immediate Release

Chicago, IL – October 16, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Harley-Davidson (HOG), US Airways (LCC), United Airlines (UAUA), Southwest Airlines (LUV) and American Airlines (AMR).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Thursday’s Analyst Blog:

Harley Fails to Meet Estimates

Harley-Davidson (HOG) disappointed in its third quarter results, posting a net income of $26.5 million or 11 cents per share compared to the Zacks Consensus Estimate of 22 cents per share. Compared to the year-ago quarter, net income tumbled 84% from $166.5 million

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The Federal Aviation Administration (FAA) on Wednesday accused US Airways (LCC) for operating eight airplanes last year without conducting the mandatory safety checks. The FAA has proposed a penalty of $5.4 million against US Airways. FAA documents allege that US Airways sanctioned 1,647 flights in violation of mandatory safety checks. The flights were operated from Oct. 2008 to Jan. 2009 and were out of compliance of flouted airworthiness directives (ADs) and its maintenance program. After being charged, the management said that the specific regulations were broken when it was integrating new maintenance systems following its merger with America West and has since worked with the FAA to fix the problems. The air carrier has been allowed a grace period of 30 days to justify itself. Though the management is trying to work out a resolution with the FAA, it is quite unusual for the fines ...

Southwest Airlines (LUV) reported an operating income of 3 cents per share, ahead of the Zacks Consensus Estimate of 2 cents per share. This was lower than the profit of 9 cents per share in the prior-year quarter. Passenger revenues decreased 7.8% to $2.6 billion from $2.8 billion in the prior-year period. Cargo & Freight revenue decreased 24.3% y-o-y to $28.0 million, primarily due to fewer shipments as a result of the ongoing worldwide recession. Other revenue increased 1.1% y-o-y to $88.0 million. Fall-off in business travel because of the recession negatively affected the revenues. Total operating expenses decreased 5.7% year-over-year, mainly due to lower energy prices. The quarter’s operating expenses included $27 million of early out program launched during the previous quarter. Southwest’s revenue passenger miles (RPMs) increased 4.7% y-o-y to 19.7 billion miles from 18.8 billion miles in the prior-year quarter. Capacity (available ...

For Immediate Release

Chicago, IL – October 9, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Southwest Airlines (LUV), Frontier Airlines Holdings (FRNT), Republic Airways Holdings (RJET), Continental Airlines (CAL) and United Airlines (UAUA).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Thursday’s Analyst Blog:

Southwest September Traffic Spikes

Southwest Airlines (LUV) announced its preliminary mainline traffic results for September. The company reported an 8.8% surge in traffic to 5.8 billion revenue passenger miles from 5.3 billion revenue passenger miles a year ago.

Load factor, or the percentage of available

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Southwest Airlines (NYSE: LUV) and ITA Software, Inc., the leader in developing innovative solutions for the travel industry, today announced advanced capabilities that support Southwest’s website enhancements and allows the airline to further extend the capabilities of southwest.com moving forward. Southwest selected ITA’s QPX(TM) system to support its recent website updates, making it even easier for customers to take advantage of the airline’s industry-leading low fares.

Midcontinent Express Pipeline (MEP) has received authorization from the Pipelines Hazardous

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Southwest Airlines (LUV) yesterday announced discounted fares for winter travel. The discounts were offered in order to increase travel to make up for the lost revenue due to the recession.   Southwest has been hit hard by slowing demand due to the recession and volatile fuel prices. As a part of its cost-cutting initiatives, the company has cut its capacity along with downsizing employees.   The air carrier is scrambling to fill its seats this winter by offering big fare discounts. The discounted fares will be offered on travel any day except Fridays and Sundays from Oct. 13 through Feb. 11. The company also said that travel to some destinations would start at $59 each way however seats for such offer are limited.   However, the sale prices are higher than they were for other recent Southwest promotions and up to 50% higher than during a big ...

Southwest Airlines (LUV) said on Friday that its August traffic grew 1.5% to 6.7 billion revenue passenger miles (RPM). Load factor increased to 80.2% from 74.6% last year. However, capacity fell 6.1% from the prior-year period to 8.3 billion available seat miles.

In August, Southwest Airlines reported second-quarter profit of $54 million on sales of $2.6 billion. Both revenue and net income declined from the prior year as the carrier was hurt by low demand for business travels. Unless demand rebounds, management sees third-quarter sales shrinking further from second-quarter levels.

Southwest’s successful business model involves flying multiple short, quick trips into secondary airports of major markets and using only one type of aircraft, the Boeing 737.

In addition to other cost-containment measures undertaken by the company, it has frozen hiring as well as pay for officers and senior management. Recently, Southwest also launched an early-out program in which

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• Warner Chilcott (NASDAQ:WCRX) has bought Procter & Gamble's (NYSE:PG) prescription drug unit for about $3 billion

• Apple (NASDAQ:AAPL) told US regulators that Google's (NASDAQ:GOOG) voice app was not approved for use on Apple's (NASDAQ:AAPL) iPhone because it interferes with "user experience"

• According to Nokia (NYSE:NOK) the firm expects to regain market share against Apple's (NASDAQ:AAPL) rival iPhone and Research in Motion's (NASDAQ:RIMM) Blackberry, mentioning a new device with a Linux operating system and a netbook product likely

• Southwest Airlines (NYSE:LUV) promised Wi-Fi in all of its planes by next year

Zacks Investment Research

Markets Coming Down with Swine Flu

by The Investment U Research Team

If the markets weren’t walking on eggshells already, they didn’t need an outbreak of swine flu to put them back in the intensive care ward. We’ve been looking for proximate causes for a pullback in the markets, but swine flu wasn’t one of them.

For the ultra-cynical, start shorting airline stocks like Southwest Airlines (NYSE: LUV) and Delta Air Lines (NYSE: DAL), and buying any biotech that has to do with flu vaccines or heap masks. It’ll be the knee-jerk reactions to any whisper of plague.

But it might be too late to go that route for investors; the biggest gains have already been made. For traders it’s a different story – they should love the volatility this adds.

For investors looking for what’s next –

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